It is important that every year you consider some basic disciplines for trading the ForexMarket.For both Forex newbies and those traders with more experience out there, here are a few things you should remember before you set new trading goals for any cycle period.
FOR THE NEWBIES:
1 . FOREX TRADING IS NOT A GET RICH QUICKLY SCHEME
I am sorry if I am the first one to say this to you, but this is something that you have to learn right from the start.
It’s possible to make fast money, let’s be clear about that, but odds are probably you will end up losing your investment unless you are part of the 1% camp of naturally born, financial wizards who can sustain a 100% gain a year for an entire career. Let me say now the chances are you will end up broken if you don’t have the proper education and mindset to trade.
The dream idea that you will start trading in 6 months you will have financial freedom is total propaganda!! Don’t buy into this.
The real truth is that Forex trading is a business!A long and grinding business of highs and lows.It needs to be treated as such just like any other venture in your life.
But how can you avoid falling into that kind of trap?
Do your homework properly. Look for a place for you to learn to trade where you have the support from real professional traders. Platinum Trading Academy members strive for consistency. Platinum Traders will always wait for the market to come to them. That’s because they learn to trade exactly like the institutions do.
2. NEVER TRADE MONEY YOU CAN’T AFFORD TO LOSE.
One of the most common newbie mistakes is risking money they can’t afford to lose.
The majority of the people are looking for easy ways to become rich and that is no different with most retail traders. However, as I always like to say, there is no easy money anywhere, especially not in this job. Because of the vast opportunities that the FX Market offers every day, traders are inclined to invest the money which they can’t afford to lose. You need to consider the possibility of losing all your fx capital and what to do if that happens!
In order to become a trader, you need to take out the fear of losing money so you can focus on your trading skills. Mindset is everything in trading. The job of a trader is to make the best trades. Money is secondary.
You don’t have to start with live capital. In fact, here at Platinum Trading Academy, we teach our members to start always with a demo account. When you learn to treat trading as a business, you will start seeing a demo account as part of your research period.
3. HAVING A TRADING JOURNAL IS THE RECIPE FOR SUCCESS
Talking from own experience, my life as a trader changed the day I started to keep records of my trades. It is hard to explain why such a simple thing makes so much difference. I used to think that a Trading Journal was not necessary, but how wrong I was.
Because you are new, you will likely make a lot of trading mistakes which naturally takes experience to overcome. A very simple and well-kept trading journal could speed up the improvement process by showing you what is working and what is not and if you are making the correct and necessary changes.
Just have an excel spreadsheet and record all of your trades with the following:
Date, Direction (buy/sell), Market (eur/usd, oil), Position Size, Stop, Target, Reward/Risk, Reason for the trade and the outcome. Always take a picture of the actual setup as well.
You have no idea how this will improve your trading and how it will accelerate your learning curve. A good exercise is to refer back to your journal and look at your trades of 2-3 months ago. Study them and ask yourself if you would have taken those trades again. Also be open to ideas which could improve the way you record your trades and refine your journal.
What is not measured cannot be managed.
4. ASKING FOR HELP WILL NOT HURT YOU.
No trader is an island.
Traders are by nature competitive and the purpose of having a “trading system” is to have an “edge” over other traders which will lead to more profits than losses. A trader normally feels that his system is better than others, so why should he listen to someone else’s opinion or idea?
All traders start out at the bottom and have to work their way up the ladder of success, but that does not mean we should not help each other along the way.
The fastest way to climb to the top and be successful is to reach out to other traders and learn from their experiences.
All professional traders were once newbies. Here at Platinum Trading Academy, we offer a lot of support to our members. Services like Platinum Trading Television (PTV) and the Platinum Trading Floor offer second to none daily analysis to Platinum Traders running every day all year round.
Another advantage is the opportunity to be mentored by a professional trader who trades the market full time using the Platinum Methodology.
FOR THE MORE EXPERIENCED TRADERS:
1. NEW IS NOT ALWAYS BETTER.
Before you explore new strategies this year, take a second look at your old ones and check if a simple adjustment in stop losses, position sizing or indicator settings would have changed the outcome of your trades.
There is a belief that “new is better,” particularly I don’t agree with that as the truth. Just check your journal to see if you consistently executed your strategy and if not, make the necessary amendments to perfect your edge.
Even the best strategies can’t be made profitable with poor execution. Platinum Traders will have no problem to approach new strategies, but core idea of the Platinum Methodology using intuitional thinking cannot be violated.
2. SET REALISTIC EXPECTATIONS.
Just because you caught a 200:1 reward-to-risk trade last year, that does not mean that you should aim for a 1,000% gain in your account this year.
Set your goals and expectations based on your average performance, available time for trading and capital limitations.
According to the Platinum Methodology, we only take a trade if we have Perfect Fundamentals + Perfect Technical Analysis + Perfect Logic + Perfect Risk Management = Perfect Trade
That’s why we can keep calm in any market condition and do fall into this kind of trap. You must have a set of rules to follow on your trading plan. You should plan your trades and trade your plan. No matter the outcome, the next trade will just be another trade managed in the same manner as the previous ones.
3. WINNING CAN BE AS DANGEROUS TO YOUR ACCOUNT AS LOSING.
Psychologically similar to how losing streaks can make you fearful of taking trades, winners can also cause psychological damage by making you overconfident.
This can lead to lack of preparation and over trading, which is worse than being too fearful because you are most likely taking unnecessary risk. When you are a Platinum Trader, you will rarely be in this kind of mindset. Simply because you learn to trade like the institutions and see trading as a business. You learn techniques to avoid getting into this kind of mindset.
No matter how big your wins are, remember to be consistent with the final point.
4. FOCUS ON THE PROCESS, NOT THE PROFITS.
All the points above can be summarized into this one. Forex trading is a marathon, not a sprint. Ask any professional successful trader and they will tell exactly that.
Like any worthy endeavor, becoming consistently profitable requires consistent practice and self-development. Sometimes having that extra support may be what is necessary for you to thrive as a trader.
Don’t be distracted by one-time profits and losses. The market is not going to end today.
Keep your eyes on the prize and stay focused on doing the right things in the right way at the right time. Do that and you cannot fail!
Hopefully, you have enjoyed today’s article as much as I have enjoyed writing it for you to read. See you in the next one.
The Platinum Formula:
Perfect Fundamentals + Perfect Technical Analysis + Perfect Logic + Perfect Risk Management = Perfect Trade
The Platinum Way
At Platinum Trading Academy, United Kingdom, we teach all individuals from different walks of life to become a full-time trader or create a secondary revenue stream by trading part-time. We trade in an Institutional Way by letting the market come to us and being patient. Using Platinum’s Trading system you can take many Pips out of the market. We can ensure using this style of trading your trading will make a turnaround as you will become much more consistent.
If you want to trade like the professionals do, making consistently profitable returns from your trading, get in touch with us and we will demonstrate live exactly how we approach the markets.
Download our free ebook to read about the various Trading Patterns that work in the Financial Market. Watch Trades of the Week Videos in our video gallery. Subscribe to Platinum’s Forex Newsletter.
Hopefully, you have enjoyed today’s article. Thanks for reading! Have a fantastic day!
Live from the Platinum Trading Floor.